Latin American e-commerce is booming. With a high online population and similarly high mobile phone penetration, LATAM is one of the world’s fastest-growing markets. This growth is no accident. Recent policy and infrastructure reforms from a number of LATAM governments have been instrumental in driving greater financial inclusion which, in turn, has influenced consumer behaviour.
But Latin American payments are far from one-size-fits-all; each country has its own unique payments infrastructure and favoured local payment methods. If businesses want to embrace the opportunities afforded by the dynamic LATAM market, they must incorporate these payment options into their offering.

Increasing financial inclusion

Financial inclusion is a key issue in Latin America, with millions of people unbanked and excluded from traditional finance. This has been recognised as a significant problem by the region’s governments, who in recent years have taken big steps to increase banked populations and improve digital payments infrastructure. The pandemic played a part in this: COVID-19-related social benefits programmes helped bank huge numbers of people in countries such as Brazil, Colombia, and Argentina.

One of the most cited examples of government-backed transformation in Latin America is Pix, Brazil’s instant payment system. It has quickly become central to the Brazilian economy and is one of the most popular payment methods in the country. Pix is a boon for both consumers and the government: consumers gain ease of payment and greater financial access; administrators can streamline tax collection, social security payments, and other services.

Brazil isn’t the only country pursuing greater financial inclusion. Colombia also has a new instant payment system, Bre-B, which has a similar design and functionality to Pix.

Government initiatives are shaping consumer purchasing behaviour in other ways. Argentina’s recent reforms to stabilise the peso and ease restrictions on imports and currency controls are making it easier for international merchants to do business with Argentinian shoppers. Despite efforts to stabilise the peso, the country’s inflation rate remains high, prompting consumers to seek credit-based payment solutions and preserve their purchasing power.

Across the region, these shifts in policy, infrastructure, and consumer needs are creating a distinct payments ecosystem; one that rewards merchants that adapt to its unique preferences and dynamics.

Payment localisation is imperative

The rise of financial inclusion and new local payment methods means offering them is no longer optional for merchants, but essential.

A comprehensive local payments strategy is key. Enabling a single local payment method and expecting it to unlock a whole market won’t work. For instance, whilst Pix is currently dominant in Brazil, digital wallets such as Nupay are gaining significant traction and we’re seeing payment preferences rapidly evolve as the impact of financial inclusion deepens.

Merchants that adopt the right mix of local methods stand to increase approval rates, lower churn, and strengthen customer loyalty.

Making the right change, the right way

Adding local payment methods is critical for merchants looking to do business in Latin America, but it needs to be done the right way.

Important considerations include full compliance with local laws and scheme rules, optimising payment collection, settlement, and conversion rates, and implementing mechanisms to block fraud. Merchants must ensure they’re working with trusted local experts to expand their payment offerings effectively and responsibly.

The drive to greater financial inclusion across Latin America is fuelling e-commerce growth. New products and financial services can now reach people who were previously denied access, creating a myriad of opportunities for merchants operating in the region. To capitalise on this, businesses must understand – and adapt to – the payments landscape and the unique preferences of individual countries. Only then will they be able to fully participate in the region’s e-commerce boom.

Therese Hudak, VP Commercial Americas at PPRO